The battle to breathe new life into an eyesore on Newcastle's finest street could soon be over.

Plans to complete the restoration of the 19th Century, Grade II-listed building at the bottom of Grey Street on the corner of Mosley Street were unveiled today.

The building has been standing derelict for more than 20 years and branded one of the city's worst eyesores. Various plans to bring it back into use have fallen through over the years.

It was taken over by Lazi Leisure and in 1998 planning permission was granted for a luxury hotel, cafe-bar and public house.

The company emb-arked on a £4m restoration scheme and much of the inside and exterior is now finished.

The roof has been renewed, the building has been made watertight and windows have been replaced.

But work stopped more than year ago and the building, which was once the home of one of the city's best-known restaurants, Amigos, is still standing empty.

The upper floors have been cleaned and the stonework refurbished, but the lower floor remains boarded up.

The city council, which now owns the building under a development agreement, has revealed discussions have taken place with the company behind the hotel plan, Niche Hotels, about a possible takeover of the long-running project.

Changes have been made to the original scheme, but planning officials say these are acceptable and the hope is that the complex will be open for business by the end of the year.

Niche Hotels intends to run the hotel but the bar and restaurant would be operated separately under franchise by Living Ventures.

John Miller, head of planning at the city council, said neighbouring businesses have been consulted and there have been no objections.

The hope is that the scheme will finally be complete by October or November, he added.